ConocoPhillips Co. officials hinted Tuesday that they could abandon any plan to build a liquefied natural gas terminal off Alabama's coast should Gov. Bob Riley veto the company's current proposal, which would use billions of gallons of seawater per year to reheat the gas.

The test of wills between opponents of the so-called "open-loop" reheating method and the world's No. 4 oil and gas company could end by June 11 -- the deadline for Riley to give a thumbs up or down on the billion-dollar project.

"ConocoPhillips will think long and hard about starting over," ConocoPhillips spokesman Steve Lawless said. "I have my doubts. This has been a long and an expensive process for what still amounts to no guaranteed outcome for us."

ConocoPhillips is 2.5 years into the approval process for its Compass Port LNG project about 11 miles south of Dauphin Island, and could back out if forced to change the design, Lawless said.

Earlier this month, Louisiana Gov. Kathleen Blanco rejected an open-loop LNG proposal off the shore of her state. Within three days, Freeport-McMoRan Energy LLC submitted a closed-loop alternative, which environmentalists and scientists say makes the project safer for fish and other marine life.

"You would not see us respond like Freeport-McMoRan responded," Lawless said. "They are a different company and in a very different situation than we are. We're a much bigger company with many more opportunities."

A key difference between ConocoPhillips and McMoRan is that the latter already has an abandoned sulfur mine in the Gulf of Mexico that it wants to convert into a terminal, whereas ConocoPhillips doesn't have existing infrastructure, Lawless said.

A closed-loop system would make it harder for ConocoPhillips to compete with other open-loop terminals or onshore terminals that are much cheaper to build, Lawless said.

Lawless said that just having a terminal, even one with access to the lucrative North American marketplace, doesn't guarantee a profitable project.

For example, construction has slowed on the Bear Head Terminal in Nova Scotia because of a difficulty securing natural gas to supply it, according to Teresa Wong, manager of public affairs for Anadarko Petroleum Corp. The $650 million onshore project in Canada is facing competition from other companies and countries, she said.

"It's been taking longer than we anticipated to lock up the supply," Wong said.

Lawless said ConocoPhillips is reluctant to operate a terminal that burns gas it would otherwise sell.

"It'd be like a car dealership -- he gets 200 cars in and he takes three of them and smashes them," Lawless said. "What's wrong with that picture? No business would do that when it really doesn't make sense, and to us it doesn't."

A closed-loop system uses about 1.5 percent of the natural gas it brings in, which could cost the company up to $40 million per year, Lawless said. That amount is about 0.3 percent of the $13.5 billion ConocoPhillips made in 2005.

It's common to burn energy to produce energy, and coal and nuclear plants use up to 1.7 percent of the energy they create, according to an Environmental Protection Agency paper associated with a proposed LNG terminal in California. The agency has recommended a closed-loop system for that terminal because it's safer for the environment, according to documents generated in its water-permit approval process.

In an effort to win over Riley, ConocoPhillips made an economic and an environmental pledge to Alabama. Among the promises were $100 million in construction spending within the state, at least $15 million in expenditures each year during its operation and a $2 million donation per year to offset any environmental impacts to fish populations.

Despite ConocoPhillips' promise to dedicate a portion of its gas for Alabama, Riley's office has said that the governor is focusing on the environmental impact of the project.

The governor "has not announced a decision and said he would wait until meeting with the ConocoPhillips officials before announcing a decision," said David Ford, the governor's spokesman.

Riley is scheduled to meet late next week before the June 11 deadline with ConocoPhillips, Ford said.

"They asked for a meeting with him, and he agreed to meet with them," Ford said.

Meanwhile, plans for a closed-loop system are moving forward at Main Pass Energy Hub, the liquefied natural gas terminal being sought by McMoRan, a spokesman said Tuesday.

"It was not like we had a dramatic awakening; we were totally familiar with the alternate technology, which was the closed-loop system," said Bill Collier, a spokesman for McMoRan Exploration Co., the New Orleans-based parent company of Freeport-McMoRan Energy LLC, which owns the Main Pass Energy Hub.

Operating a closed-loop system will cost the company an additional $25 million annually, Collier said.

"That's significant," he said, "but obviously we think we can make it work."

The project recently received permission from the Federal Energy Regulatory Commission to connect a 93-mile pipeline with Alabama's pipelines in Coden. The terminal off Louisiana's shore could feed up to 3 billion cubic feet per day into the state, Collier said.

Another 52-mile pipeline would connect to Louisiana.

The federal government has approved three open-loop terminals in the Gulf of Mexico. They were approved before federal fisheries agencies objected.

One terminal is functioning off of the coast of Louisiana and is the only open-loop terminal in the United States. The other two have not been built.